This says that the BP review just accepts the official numbers from the Middle East countries even though they do not change.

Even if all countries were completely transparent with their data, it would still be difficult to get a meaningful account of reserves because:
1) No one really can tell with total accuracy how much oil is below the ground yet to be extracted
2) The first barrel that flows from the well has a different economic cost than the last barrel
3) A barrel of oil of Brent light sweet crude is different than a barrel from the Canadian Oil Sands

On top of that we have a fair amount of manipulation of figures in order to meet the goals of the reporting agency. As the article below asserts (from ODAC: http://www.odac-info.org/), The EIA and US Geological Survey estimates of oil reserves are not reliable.

Saudi Sees No Return to Low Oil Prices

Calling US Energy Information Administration (EIA) price forecasts "unrealistic and misleading", a recently retired executive of the Saudi national oil company, Aramco, predicts that supply constraints will inevitably lead to higher oil prices through the end of this decade. "Given the complex issues associated with finding and developing substantial new production capacity within a limited number of years, there is little ground for optimism regarding a return to an era of inexpensive oil prices", former Saudi Aramco Vice President Sadad al-Husseini writes in the US trade publication, Oil & Gas Journal ('Why higher oil prices are inevitable this year, rest of decade', August 2, 2004). While geopolitical problems in the Middle East and elsewhere are likely to continue to influence oil prices "for years to come", he says that the US Geological Survey and EIA conclusions about future oil production capacities "are not straightforward and cannot be reliable." He!
sees no evidence of the massive investments with supportive national policies "occurring on the required scale anywhere in the world" to meet projected increases in demand, and in any case, "there are good technical reasons to believe that the remaining oil and gas resources are in fact of much lower quality and profitability than the global reserves now being consumed." Given that "no major oil discoveries or expansion projects are now in sight," he concludes that "it would take years of investments to replace declines, let alone adding new net increases in production capacity."

As Glenn has emphasized many times, it really does not make that much difference what the total reserves are; what is more important is the rate at which we can extract them. Once we are unable to extract the oil at a rate that will produce the net amount needed to satisfy the current world demand, there will have to be some way to apportion this smaller amount among those who want more than they are going to get. The next paragraph from ODAC (http://www.odac-info.org/), The Oil Depletion Analysis Centre, indicates that we are getting close to that point.

Over Half the World's Oil-Producing Nations Past Peak Production

Of the top 45 oil-producing nations that accounted for 98.7 percent of world oil production in 2003, a total of 25 (including 7 of the 11 OPEC nations) are now past their peak production, according to Richard Duncan, director of the Institute on Energy & Man. This concurs with an earlier study by UK energy analysts Douglas-Westwood, which found that 52 of the 99 countries that have or can produce significant volumes of oil are already well past their peak. Writing in Oil & Gas Journal (July 19, 2004), Duncan also reports on the results of his latest forecast of global peak oil production. The forecast shows that a large increase in the estimated ultimate recovery (EUR) Β― the total volume of oil deemed recoverable worldwide, as opposed to the total resource base or 'oil in place' Β― would delay global peak production by only a few years. An earlier forecast predicted that global peak would occur in 2007 based on an EUR of about two trillion barrels. The new fo!
recast assumed a much larger EUR of 3.3 trillion barrels and found that the effect would be to delay global peak production by three years, or about one day for every billion barrels added to the EUR.
Received on Thu Aug 19 14:16:02 2004